With February's unemployment rate falling, all eyes are on the direction of the Swiss franc

With February's unemployment rate falling, all eyes are on the direction of the Swiss franc

08.03.2023

In the U.S. currency market the previous day, the U.S. dollar strengthened against the Canadian dollar following hawkish remarks by Federal Reserve Chair Powell.The USD/CAD pair rose from 1.3598 to 1.3760, closing with a strong bullish candle on the daily chart. Yesterday’s rise pushed the USD/CAD pair up to the +2σ level of the weekly Bollinger Bands. The weekly RSI has resumed its upward trend from the 48 midpoint. On the short-term hourly chart, the RSI is showing divergence from the 87 level, so traders should be cautious of a pullback during European trading hours.

Among European currencies, the Swiss franc fell against the yen after the seasonally adjusted unemployment rate for February, released yesterday, came in at 1.9%. The CHF/JPY pair fell from 146.336 to 145.324, dropping below the 20-period moving average on the 4-hour chart. However, during today’s Asian session, the pair has rebounded strongly amid selling pressure on the Japanese yen and has already recovered to 146.092. We will monitor the situation closely to see if this rebound continues through the U.S. session.

Today, at 4:00 PM, Germany’sIndustrial Production and Retail Sales at 4:00 PM, remarks by UK MPC member Dingra at 6:30 PM, remarks by ECB President Lagarde at 7:00 PM, the US MBA Mortgage Applications Index at 9:00 PM, remarks by US Richmond Fed President Barkin at 10:00 PM, the US ADP National Employment Report at 10:15 PM, and Canada’sTrade Balance, U.S. Trade Balance, 24:00: Canada – BOC Policy Rate and Statement, U.S. – JOLTS Job Openings, U.S. – Fed Chair Powell’s Congressional Testimony, 24:30: U.S. – Weekly Crude Oil Inventories, 27:00: U.S. – 10-Year Treasury Auction, 28:00: U.S. – Beige Book. We will be watching the direction of the Swiss franc following the decline in the February unemployment rate.